Ukraine escalation causes FTSE’s worst day for a week

The index closed down around 3.5% on Friday, adding to a steep loss the day before.

Bombing of civilian areas has continued in Ukraine. (Efrem Lukatsky/AP) (AP)

London’s top shares have scored their worst day since last Thursday, when Russia’s Vladimir Putin started sending tanks across the Ukrainian border as part of an attempted full-scale invasion.

The FTSE 100 saw around £66 billion wiped off its value during Friday’s trading session as all but a handful of its companies fell into the red.

The index ended down 251.71 points, or 3.5% at 6987.14 after dropping below the symbolic 7,000 mark. It added to a 190-point drop on Thursday.

It came as a fire erupted at Europe’s largest nuclear power plant after Russian forces shelled the area.

“This morning’s reckless shelling of a Ukrainian nuclear power plant by Russian forces, shows that Putin is becoming increasingly desperate to obtain a victory in the face of numerous setbacks, and with little sign that he is inclined to back down,” said CMC Markets analyst Michael Hewson.

“If anything, the stubbornness of Ukrainian forces is enraging him further, in turn raising the uncertainty level further.”

He added: “Today’s sell-off has been broad based with travel and leisure getting hit hard as surging oil prices push up fuel costs for the airlines, as well as eroding consumers disposable incomes.

“While some airlines are partially hedged for rising fuel prices none of them are fully hedged. Eastern European based Wizz Air is once again on the receiving end of the heaviest losses.”

On Wall Street, the S&P 500 had dropped 1.6% while the Dow Jones gave back 1.4% around the time markets were closing in the UK.

In Germany, the Dax had an awful day, slipping 4.4%, while France’s Cac 40 did even worse, ending down 5%.

The price of Brent crude oil rose more than 3% to 113.92 dollars per barrel, UK natural gas prices also rose to an all-time high during the day of 500p per therm.

On currency markets, sterling fell 0.03% against two major rivals, buying 1.3214 dollars or 1.2104 euros.

In company news, shares in Mitie dropped close to 11% after the competition watchdog launched a probe into whether it had broken rules while trying to secure contracts with the Home Office.

The Competition and Markets Authority said that it was looking into the outsourcing giant’s contracts to provide immigration removal centres for the department. Mitie said it expects to be “fully exonerated.”

Shares in Hammerson, the owner of Brent Cross shopping centre and others, stayed flat after it announced that losses were cut over the last year thanks to the more than £500 million it had raised from selling parts of the business.

There is also rebounding demand for retail space, the business said.

The biggest risers on the FTSE 100 were Evraz, up 6.9p to 60p, Fresnillo, up 58.8p to 742p, London Stock Exchange, up 270p to 7,254p, SSE, up 29.5p to 1,595p, and Hargreaves Lansdown, up 14.9p to 336.6p.

The biggest fallers on the FTSE 100 were Burberry, down 150p to 1,641p, Smurfit Kappa, down 266p to 3,045p, CRH, down 252p to 3,004p, Flutter Entertainment, down 640p to 8,000p, and BT, down 13p to 167.45p.